Key Points

Following a week that saw over one trillion dollars in market value erased, technology giant stocks showed overall stability during Monday's pre-market trading, marking the start of a new trading week. In early pre-market trading, Oracle and Microsoft saw slight gains, while Meta Platforms, Alphabet, Amazon.com, and NVIDIA experienced minor declines. The artificial intelligence boom has prompted major companies to announce substantial capital expenditure plans for 2026, raising concerns among investors.

After a significant downturn last week that wiped out over a trillion dollars in market capitalization, technology giant stocks stabilized during Monday's pre-market session. As of 6:40 AM Eastern Time, Oracle's stock price had risen by 1.6%, while Microsoft saw a modest increase of 0.8%. Meta Platforms declined by 0.2%, and Amazon.com remained flat. Alphabet fell by 0.5%, and NVIDIA retreated by approximately 0.9% after its 7.9% rebound on Friday. Last week, as major tech companies reported earnings, they consistently raised their capital expenditure forecasts, increasing investments in the artificial intelligence sector. This trend has contributed to growing market anxiety. Amazon.com, Alphabet, Microsoft, and Meta Platforms disclosed that their combined capital expenditures for the fourth quarter alone reached approximately $120 billion. Projections for 2026 suggest this figure could approach $700 billion, surpassing the Gross Domestic Product of countries such as the United Arab Emirates, Singapore, and Israel. The head of global macro research at Deutsche Bank noted in a Monday report that last week was the worst performance for the "Magnificent Seven" since April of last year—a period when US tariff hikes triggered a market crisis, causing the sector's stocks to plummet by 4.66%. He pointed out that by the close of trading last week, signs of recovery were evident. Despite Amazon.com's stock dropping sharply by 5.55%, the "Magnificent Seven" as a group still managed a 0.45% gain on Friday. A US Bancorp Securities research analyst stated in a Monday report that, against a challenging macroeconomic backdrop, cloud computing companies continue to see improving profit margins, but their stock prices face "potential volatility risks." He added, "However, corporate management appears confident in their demand forecasting capabilities and believes computing capacity for 2026 will be fully utilized." The chief investment officer for US equities at UBS Financial Services remarked last Friday that the capital expenditure guidance provided by Amazon.com and Alphabet was "significantly above" general market expectations. The market reacted negatively to this news, which also "overshadowed the better-than-expected growth performance of both companies' cloud computing segments." NVIDIA's CEO stated last Friday in an interview that current market demand for computing power remains "exceptionally high." He defended the tech industry's substantial capital investments in AI infrastructure as justified. Analysts anticipate that capital expenditures from hyperscale cloud service providers still have room to increase. Morgan Stanley noted in a Monday morning report: "As the number of tokens processed monthly grows exponentially, total cloud revenue growth for Google Cloud, Amazon Web Services, and Microsoft Azure continues to accelerate. With increasing commitments to data center investments and data center component suppliers indicating rapidly rising demand, we believe capital expenditure expectations for hyperscale cloud providers will face ongoing upward revision pressure."